HYDRO HAS ENTERED INTO SALES AND PRODUCTION AGREEMENT WITH BASF

Main Menu | News By Date | News By Supplier | News By Category | About Us

HYDRO HAS ENTERED INTO SALES AND PRODUCTION AGREEMENT WITH BASF
25 April 2002 - Hydro Aluminium

Yesterday, Norsk Hydro and BASF, the German industrial conglomerate, signed an agreement whereby BASF will purchase the feed additive Formi. At the same time the two companies signed a production agreemnt whereby Hydro will produce Formi for BASF over a 15 years' period. This agreement is expected to provide Hydro with income in the order of NOK 1 billion over the contract period.

Formi is the result of a successful, innovative research programme in Porsgrunn. This agreement with BASF enables Hydro to reap the gains from its Hydro Formates business unit having received EU approval last year of Formi being the first non-antibiotic growth promoter for use in pig feed. Formi is an alternative to the antibiotic growth promoters, which are being phased out or completely banned in a number of countries. It is expected that the four antibiotic types permitted by EU today will be gone already by 2006.

'It is very good news for Hydro that we have successfully completed this agreement with BASF', says Kjell Ramberg, Chairman of the Board of Hydro Formates.

BASF has been a natural partner for Hydro throughout the process. Not only is BASF the world's largest manufacturer of formic acid, which is a key component of Formi. Also, one of BASF's core areas is animal nutrition and BASF is one of the largest global players in the area. The company has over many years acquired vast experience in the sale of feed additives and today offers an extensive range of products, in which Formi will represent an exciting addition.

Hydro Formates will continue to produce Formi at its Porsgrunn plant. It is anticipated that sales of Formi will be substantial, and plans are already being made to triple production capacity at the plant. BASF plans to meet a further increase in demand through separate production in Ludwigshafen.

'We will hire more staff in Porgrunn and manufacture for BASF for 15 years. Next year we plan to invest NOK 120 million in connection with production at the plant in Porsgrunn', explains Egil Greve, manager of Hydro Formates.

The extensive expertise that Hydro Formates has acquired through product development and the six years long approval process will be benefical to the close cooperation between Hydro Formates and BASF in the future.

About: Hydro Aluminium

More News:
  • For April 2002
  • From Hydro Aluminium
  • For General